Previous Year Paper Solution | Indian Economic Service Exam 2022 | General Economics - II

Section - A

1. Answer the following questions in about 100 words each :

Marks: 5 × 6 = 30

(a) What is the real cash balance effect ?

(Comment for solution.)


(b) Which policy will be effective if the IS curve is vertical ?

(Comment for solution.)


(c) Illustrate, with a suitable example, how call options can be used for the purpose of speculation.

(Comment for solution.)


(d) Explain the difference between the concepts of convergence and conditionl convergence.

(Comment for solution.)


(e) Explain the multiple exchange rate system and the advantages associated with it.

(Comment for solution.)


(f) Explain how transfer pricing is generally used by a multinational corporation as a method of increasing profit.

(Comment for solution.)


Section - B

Answer any six out of the following nine questions in about 200 words each :

Marks: 15 × 6 = 90

2. How can Quesnay's Tableau Economique be regarded as a forerunner of modern circular flow of income and expenditure without government ?

(Comment for solution.)


3. Explain the differences among Gross National Product (GNP), National Income and Disposable Income. What adjustment have to be made in order to calculate Green National Income ?

(Comment for solution.)


4. Enumerate the basic differences between the Keynesian and Monetarist schools of thought in stimulating demand.

(Comment for solution.)


5. Explain the relationship between finance and economic development in the context of a modern money-using market economy.

(Comment for solution.)


6. Discuss Rostow's stage theory of growth and compare it with Lewis' economic development with unlimited supplies of labour.

(Comment for solution.)


7. What is instrumental in Solow's growth model and what are its limitations ?

(Comment for solution.)


8. Explain the relationship between the relative prices of output and relative factor rewards in the light of Stolper-Samuelson theorem.

(Comment for solution.)


9. Do you agree that an economy cannot simultaneously maintain a fixed exchange rate, free capital movement and an independent monetary policy ? Explain.

(Comment for solution.)


10. Explain the changes in principles of multilateral trade negotiations over the globe since 1995.

(Comment for solution.)


Section - A

Answer any four out of the following six question in about 300 words each :

Marks: 20 × 4 = 80

11. Discuss the concepts of dichotomy and neutrality of money in the light of classical, neo-classical and Keynesian economics.

(Comment for solution.)


12. Distinguish between short-run and long-run Phillips curve and discuss their policy implications.

(Comment for solution.)


13. Economic growth may raise income inequality though the incidence of poverty may get reduced. Discuss this proposition.

(Comment for solution.)


14. What are the major determinants of growth as entailed in the endogenous growth model ? Elaborate.

(Comment for solution.)


15. How has Haberler improved upon the Ricardian theory of international trade ? Explain.

(Comment for solution.)


16. Discuss the mechanism of adjustments in the event of disequilibrium in the balance of payment.

(Comment for solution.)


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